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Accountability gaps limit state oversight of $694 million in grants to non-profit organizations : final report to the Joint Legislative Program Evaluation Oversight Committee.

Accountability gaps limit state oversight of $694 million in grants to non-profit organizations : final report to the Joint Legislative Program Evaluation Oversight Committee. - Page 14

Non- Profit Grants Oversight Policy Report No. 2009- 02
Page 10 of 28
reports for completeness, but the value of each report’s content rests in the
quality of the audit and the thoroughness of the auditor conducting the
audit. In the course of this review, the Program Evaluation Division learned
of concerns regarding the quality of audits that are meant to provide
accountability assurances.
The activities information that grantees are required to report to the
state does not adequately address performance goals and outcomes.
According to administrative rules, non- profit grantees receiving or
expending any amount of state funds must submit activities and
accomplishments information. All grantees describe their original goals and
submit a narrative of accomplishments. In addition, grantees receiving or
expending $ 25,000 or more provide more detail, explaining how they
have revised their goals during the course of the project and summarizing
future plans and funding prospects.
Administrative rules require agencies to evaluate the outcomes of grantee
activities to determine if results were achieved and whether grantee
activities should continue. Nearly half of the agency grant monitors
surveyed by the Program Evaluation Division reported they used the goals
and accomplishments information submitted to the Grants Information
Center to evaluate program results and outcomes ( 47%) and to determine
if program results were achieved ( 45%).
Because the state collects the goals and accomplishments information in an
open- ended format, grantees may not provide useful or enough
information for agencies to properly evaluate grantee performance. For
example, the state does not specify that grantees must report the number
of people served or the quantity of goods or services delivered.
Administrative rules require agencies to evaluate grantee results, but there
is no framework to guide the assessment. The goals and accomplishments
information, then, leaves the assessment of program performance
inadequately addressed by state reporting requirements. Accountability
cannot be fully established without performance outcomes, especially when
the deliverable is a program.
Reporting deadlines complicate timely reporting on state grants and do
not account for funds until after they have been expended by grantees.
This issue is two- fold: first, non- profit grantee reporting cycles are
determined according to each grantee’s fiscal- year end, making it difficult
to assess the amount and status of North Carolina grants to non- profits at
any one time. Second, because annual reports are not due until six to nine
months after each grantee’s fiscal- year end, financial accountability may
not be assured until long after funds have been spent.
Non- profit grantees report activities and financial information annually
based on their organization’s fiscal year, which may or may not match the
state’s fiscal year. Of the 2,758 grantees that received awards in Fiscal
Year 2007- 08, 46% had fiscal years coinciding with the state fiscal year
( June), 41% had fiscal years ending in December, 8% had fiscal years
coinciding with the federal fiscal year ( September), and 5% had fiscal
years ending in other months. Although it may be easier for grantees to
report information based on their own fiscal year rather than the state
fiscal year, the current reporting cycle limits the state’s ability to account

Non- Profit Grants Oversight Policy Report No. 2009- 02
Page 10 of 28
reports for completeness, but the value of each report’s content rests in the
quality of the audit and the thoroughness of the auditor conducting the
audit. In the course of this review, the Program Evaluation Division learned
of concerns regarding the quality of audits that are meant to provide
accountability assurances.
The activities information that grantees are required to report to the
state does not adequately address performance goals and outcomes.
According to administrative rules, non- profit grantees receiving or
expending any amount of state funds must submit activities and
accomplishments information. All grantees describe their original goals and
submit a narrative of accomplishments. In addition, grantees receiving or
expending $ 25,000 or more provide more detail, explaining how they
have revised their goals during the course of the project and summarizing
future plans and funding prospects.
Administrative rules require agencies to evaluate the outcomes of grantee
activities to determine if results were achieved and whether grantee
activities should continue. Nearly half of the agency grant monitors
surveyed by the Program Evaluation Division reported they used the goals
and accomplishments information submitted to the Grants Information
Center to evaluate program results and outcomes ( 47%) and to determine
if program results were achieved ( 45%).
Because the state collects the goals and accomplishments information in an
open- ended format, grantees may not provide useful or enough
information for agencies to properly evaluate grantee performance. For
example, the state does not specify that grantees must report the number
of people served or the quantity of goods or services delivered.
Administrative rules require agencies to evaluate grantee results, but there
is no framework to guide the assessment. The goals and accomplishments
information, then, leaves the assessment of program performance
inadequately addressed by state reporting requirements. Accountability
cannot be fully established without performance outcomes, especially when
the deliverable is a program.
Reporting deadlines complicate timely reporting on state grants and do
not account for funds until after they have been expended by grantees.
This issue is two- fold: first, non- profit grantee reporting cycles are
determined according to each grantee’s fiscal- year end, making it difficult
to assess the amount and status of North Carolina grants to non- profits at
any one time. Second, because annual reports are not due until six to nine
months after each grantee’s fiscal- year end, financial accountability may
not be assured until long after funds have been spent.
Non- profit grantees report activities and financial information annually
based on their organization’s fiscal year, which may or may not match the
state’s fiscal year. Of the 2,758 grantees that received awards in Fiscal
Year 2007- 08, 46% had fiscal years coinciding with the state fiscal year
( June), 41% had fiscal years ending in December, 8% had fiscal years
coinciding with the federal fiscal year ( September), and 5% had fiscal
years ending in other months. Although it may be easier for grantees to
report information based on their own fiscal year rather than the state
fiscal year, the current reporting cycle limits the state’s ability to account